Calculate the inventory-to-sale conversion period based on the following information: average inventories = $120,000; average receivables = $90,000; average payables = $40,000; cost of goods sold = $182,500; and net sales = $365,000.
A) 240.0 days
B) 180.0 days
C) 90.0 days
D) 60.0 days
E) 45.0 days

Question

Quizplus · Accepted Answer

Inventory-to-sale conversion period = (Average inventories / Cost of goods sold) * 365 days= ($120,000 / $182,500) * 365 days= 240 days

Calculate the Inventory-To-Sale Conversion Period Based on the Following Information